Opposition BJP in Maharashtra said foreign investment in every sector was not a remedy to the current ills of the economy and it would oppose raising of FDI caps in insurance and pension sectors.
The BJP will oppose raising of foreign direct investment (FDI) cap from 26 percent to 49 percent in insurance and pension sectors, when it comes to Parliament, former Finance Minister and senior party leader Yashwant Sinha said.
“If the government wants to raise FDI to 49 percent both in insurance as well as in pension, then we will not be comfortable with that,” he said. “Let’s not place our overconfidence in FDI as the panacea for all our ills, it has to be domestic demand and domestic savings,” Sihna, BJP’s lead spokesperson on economic affairs, said.
Incidentally, BJP-led NDA government had proposed higher FDI in these two sectors. Sinha, who heads the Parliamentary Standing Committee on Finance, was replying to a question about reports in certain sections of the media on possible increase in FDI in the two sectors.
He said the Cabinet has prepared a note to raise the existing 26 percent cap in both the sectors and is also preparing to move legislations to facilitate the same in the forthcoming Monsoon Session. During his speech, Sinha, however, took a diabolical stand, prominently mentioning passing of reform legislations as one of the six points to come out of the present economic troubles.
Asked to elaborate on the reasons why the BJP is against the raising of the FDI cap, Sinha said a paper presented by his party had clarified its stance in the matter. Along with reform legislations, Sinha suggested prudent fiscal management and addressing supply-side constraints to pull down inflation, which can help RBI lower rates, focus on the infrastructure and housing sectors and dealing with power sectors’ troubles as the measures which can lift sagging spirits.
Sinha was strongly critical of Prime Minister Manmohan Singh and advised him to show “decisiveness” as he takes on the mantle of the Finance Minister. Pointing out that Singh had entered Parliament through Rajya Sabha, Sinha said, “People sitting in New Delhi’s ivory towers cannot be the Prime Minister.”
He said it was difficult to reverse former Finance Minister Pranab Mukherjee‘s measures to tax retrospectively and the government must be cautious in exercising Parliament’s prerogative of introducing measures with retrospective effect in future. Attacking Mukherjee, who resigned as the Union Finance Minister on Tuesday for the presidential poll, Sinha said the stock market has given a perfect farewell by rising 2.5 percent after he moved out of the North Block.
He also suggested a sovereign bond issue to the diaspora like the Resurgent India Bonds or the Millennium Bonds, which were undertaken under the NDA regime to tide over current issues over the rupee.